this is two hours. >> this hearing will come to order. mr. wheeler. if confirmed, you will lead an agency that has most challenging and complicated issues pending since the telephone communications act -- telecommunications act of 1934. i don't say this lightly. the decisions the fcc makes under your leadership, should you be confirmed. the future of the nation's telephone network, public safety, the wireless industry, broadcast, the internet, and consumer protection are at stake for years to come. of all the penning issues --

pending issues before the commission, the current proceeding and one future rulemaking are of utmost importance to me personally. the incentive auction proceeding will create the revenues to fund a nationwide public safety network. i feel so strongly about this and i have ever sense september 11, 2001. and before that, really, when we went into kuwait and none of the branches of the service could talk to each other. it's a mammoth undertake can and i understand that. the e-rate program is exposing children to -- in extraordinary ways. not always helpful. the distracted driving to the character of our generations coming up. as i called for several months ago, and the president, more importantly, said in his recent remarks in north carolina, the

fcc can help make sure our schools and libraries can meet the data and productivity needs necessary for today and for the future. updating the e-rate program to meet the needs of the 21st 21st under is necessary for our children and national competitiveness. the culmination of these two initiatives as my highest priority. i hope it will be yours as well, too. too much is at stake not to get them right. if the sheer magnitude and complex-to-these issues were not enough, you face an agency that has becoming increasingly polarized and politicized. some even question its relevance in a digital age. but i think the agency is more relevant and important than ever, and at its core the fcc is a regulatory agency. i believe that too many have forgotten the agency's fundamental responsibility is

regulation of communication networks. the regulations serve important policy goals. you cannot have universal service without regulation. you cannot ensure competition without regulation. you cannot have consumer protection without regulation. let me be clearer. even as communications networks evolve some technology advances, the fccs mission does not. the rules and regulations we have in place now may not be the rules we need for the future. but that does not mean we should not have any as so many in the industry seem to advocate, and some of our colleagues to, also, and i understand that. i think we can all agree that the rules of the agency need to adopt -- i should condition -- should conditions change, evolve. so that every american, no matter where, has access to

broadband. so easily said, and so easily avoided. by all forms of those undertaking it. promises made, promises not kept. is the pattern i have found and i'm sure -- any rural state finds there's a deficit of attention. the rules the agency needs to adopt should guarantee that every child in america can harness the power of the internet dwight safely. the rules the agency needs to adopt should empower consumers with the information they need to make informed choices. he rules the agency needs to adopt 0 shoo continue to create conditions for job creation, info vegas, -- innovation. the fcc under the leadership of chairman genachowski made progress but an awful lot remains to be done. new challenges will occur.

the fcc chairman must be more than the arbiter of industry interests, and very effective in making their cases. exclusively for them. not necessarily looking at the broader good. bottom line, characteristic, truism, long hoyt. -- long history you must use the vast statutory authority to advocate for the public interest 34 communications act. all -- and the consumer, also, the parents and the students, all of those without an army of advocates to lobby on their behalf, we're concerned about people that come to visit, wireless this and wireless that and white spaces spaces spaces e fa hertz or whatever. and that's fine because they're a big part of the puzzle.

but the goal is to provide access for and protection to the people who use this, and those who are not using it who should be using it, in my judgment. you will bring to the job a long excite distinguished career in the communications industry. as a pioneer in the cable and wireless industries you have been instrumental in the growth of both of these critical sectors. as an entrepreneur you have built businesses and created jobs. most importantly you understand the power of technology. how it has already transformed our lives and how it continues to too so each day. in closing, your career is one of innovation, leadership, and public service. i believe that as chair of the fcc, you can use your experience and skills to harness the vast, vast power of the fcc. not shy away from it but harness

it. use it. to spur universal deployment of advance technology, foster growth, innovation, and protect consumers. thank you. >> distinguished ranking member. >> thank you, mr. rockefeller. mr. wheeler, want to thank you for your interest to serve as the next chairman of the fcc and bring your considerable experience to the agency. we're in the midst of a revolution that promises to improve the lives of all americans. today grandparents who live thousands of miles away can see their grandkids grow up due to the internet and video applications. small business owns in places like south dakota use smart devices to run their companies and have access to technology that previously only the largest corporations other use, and doctors are able to help folks in rural america without patients traveling hundreds of miles to see a specialess.

last we can we talked about south dakota, and i want to spend an open invitation to visit. there's noh nothing like seeing first hand the challenge of rural communication delivery and the value technology holds for americans in rural states ump you can also replace the old sign from wall drug. you have written, and i quote, that the communications act and it enforcer, the fcc,-analog leg gays in a deathal world, and regulation designed around 20th century technology and monopoly structure is not a tool for dealing with multiple self-service providers. i think that frames or goal. coming from someone with that aspiration to lead. the first question, will you work with congress and seek to amend the law where it may be

inadequate or outdated? the two previous fcc chairman both chose to enter flint the broadband market based on questionable legal theories rather than any clear statutory authority or congressional attempt. the first attempt was struck down in court and the second may yet meet the same fate. if the commission loses again i hope you'll come to congress for legal clarity or revision instead of wasting more public resources on regulatory adventuring. i hope you would refrain from applying the carriage regime to our modern background economy. second, we conduct agency business transparently. you have been criticized that the fcc create de facto regular las vegas for the industry, or underscoring its ability to do so. i hope you understand the anxiety among lawmakers when a potential agency chairman, tasked with executing the law, discusses using a back door to imposing a new regulatory scheme and skirting the regulatory

authority issue. congress never intended for the fcc's authority to be used as a back door policy making tool. we already have too maybe federal agencies carrying out their own agendas and overstepping their congressional mandates. we don't need the fcc to be another one. third, be a visionary. as industry leader and having served on the technology control advisory panel you have seen the power and potential of the internet. there's no debate whether our community are current laws, whether written in 1996, 18986, or 1934, consumers can choose from substitutes. all of our laws deserve to be reviewed reflecting not just today's reality but also allowing for tomorrows advances. your term at the fcc has the potential to be pivotal for the communications history, and i invite you to share your ideas regarding statutory and agency

modernization. chairman rockefeller, many members of the committee have had a chance to meet privately with mr. here and -- and i suspect there will not be enough time to address all the questions members have. i appreciate your desire to process mr. wheeler's nomination in a timely manner order to get the commission back to its full membership as soon as possible, especially given the many critical proceedings before the agency. so i await the president's additional nomination to felled the seat previously held by commissioner mcdowell, and i'm ready to work with you and our colleagues in both nominations in due course. thank you. i look forward to mr. wheeler's testimony. thank you, mr. chairman. >> please proceed. >> first we start with a technological challenge. turn the mic on. mr. chairman, ranking member, thank you very minute for the privilege of being before you

today. it's an honor to be nominated by the president, and to be considered by this committee for the position of chairman of the federal communications commission. as you have both referenced, it's been a privilege to meet with many members of this committee over the last few weeks, and if confirmed, i look forward to continuing those dialogues, because together, if confirmed, we are working in one of the most exciting, if not the most exciting, technological moment in our nation's history. i'm blessed to be joined by my family here today, and please allow me to introduce them. >> please do. >> carol wheeler, is my best

friend and the biggest-hearted, wisest person, i've ever met in my life, and this is a -- if confirmed this will be a public service that both of us perform. >> this is a very family friendly observation. >> nicole and mcna anywhere a -- mcnamara are the parent office hunter and skylar who appeared on the scene three weeks ago and made us proud grandparents, joining their two-year-old, little melvin, and senator melvin, as you might gather from his name, is from ireland, and the other set of grandparents communicate with their grandkids via skype in the internet. and max wheeler, sitting on the

end, member i am incredibly proud of. last month was a big month because melvin and nicole had twins, and it was also a big month because max graduated from the life program at george' mason university. so this is a team effort, senator, and i appreciate the opportunity to introduce the team to you. >> i am excited by the opportunity for public service, for almost 40 years, my professional life has revolved around communications technology and its various iterations during that period. in the process i have seen the role that policy can play, either as a boon to growth, or a break on innovation. -- or a brake onen know vacation in 1976 i stepped on to

this career path. first as executive vice president and then ceo of the national table television association. i fought against the fcc's rules limiting cable's ability to compete as a new video service. i worked for the ability of competitors to bring services into the home. and ncty helped lead the industry to support what is today the underpinning of the fc cs jurisdiction over cable, i became the ceo of nbau, the home computer network, the first delivery of high speed cable over cable lines. it's hard to be the home computer network when there are few home computers, and the market forecast did not come to pass, and that company went by the wayside, but i was able to

continue in the new digital world, including bringing to market the first digital video system, and the first satellite delivery of digital video. then in 1992, the cellular industry recruised me to run ctia. it was an exciting time as we built markets around the new concept of competitive local telecommunication service. during my tenure that competition what expand by the auctions of 1994. wireless was increasingly used in place of wire lines, and wireless data turned the phone into a pocket computer. all of these developments brought with them new policy challenges. what i learned from my business experience will make me a better chairman, should the senate confirm my nomination. those lessons can be summed up

in two concepts. the first is that competition is a power unto itself that must be encouraged. competitive markets produce better outcomes than regulated or uncompetitive markets. i've seen first hand the results of competition. dbs competition spurred cable's expansion into digital services. competitive local exchange carriers and cable television provision of internet access spurred telephone companies to expand their digital offerings. and the introduction of pcs licenseees spurred cellular carriers to go digital. i am an unabashed supporter of competition. i believe the role of the fcc has evolved from acting in lieu of competition, to dictate the market, to promoting and protecting competition with

appropriate oversight to see that its flourishes. the second lesson is that while competition is a basic american value, by itself it is not always sufficient to protect other basic american values. in the communications world, this committee has identified and the congress has identified issues that include improving access to broadband networks, universal service is a key -- a key tenet of the telecommunications act. we did it for electricity. we did it for phone service. we can do it for broadband. this committee has long and regularly recognized another value, and that is the use of technology to enhance public safety and public services. it makes no sense that first responders carry their own smart

tons -- smartphones because the fear they carry makes other technology impossible. and 80% of e-rate schools report the volleyball band width is below their instructional needs. assisting those who are disabled or disadvantaged is another american value. this committee's work on 21st 21st century video act is a classic example of making sure our values and technology are in sync, and of course, protecting consumers is the heart of the congressional instructions in the telecommunication act, and manifests itself in the half a billion -- i'm sorry -- half a million consumer inquiries and complaints that the commission handles annually. it is the fact that our society

depends so much on our networks, that makes the work of the fcc so very important. the commission is ably read by a well-informed and dedicated group of commissioners, supported by an excellent professional staff. chair clyburn, commissioner rosen, commissioner pai, are public service exemplars. should the senate confirm my nomination, my life experience has prepared me to participate with these dedicated professionals to carry out the intend of congress -- the intent of congress in this important area. i'm humbled to be before you today. should you so decide, i look forward to the opportunity of working with this committee and with each of you to advance the networks and services that are

defining our tomorrow. thank you, mr. chairman. >> thank you, very much, mr. wheeler. senator is in most respects a superior person to me and for that reason, and because he has to do an amendment on the floor. i want to call on him to ask the first question, while warning our colleagues that this is an amazingly important meeting and hearing, and that it's very easy to go down and vote and then slip into the many things that one has to do. so, i'm eagerly looking around the room wondering how many eyes i'm going to be staring into after our vote. so we come back right after the vote and continue that and i ask your forebearance on that. >> thank you, mr. chairman, and i appreciate your kindness in letting me go don't think my presence on the floor will affect in a positive way the

outcome of the vote on my amendment, but i appreciate your -- mr. wheeler, on your blog, mobile musing, you indicated in 2011 that the fcc should have, or at a minimum it could have, imposed conditions on the at&t-t-mobile merger that could have later been expand to the entire wireless industry. your post could be read to say the fcc should seek to do mergers what -- book door to imposing a new regulatory regime in wireless, end quote, and i mention that in my opening statement. this concerned me because i believe the fccs transaction review authority should be used only to address the competitive or public interest questions. rather than using strong-arm merger conditions to impose de facto regulations, shouldn't the fcc instead use its public and transparent rulemaking authority to implement industry-wide

regulatory policy? >> thank you, senator. i appreciate you raising that issue, and i understand your concern. what you cited was hypothetical speculation. what a regulator must deal with are the realities of a specific case, and the law and precedent that deals with merger review. there is scarcely anything more important that comes before the commission than merger review, and that review must be conducted precisely, based upon the facts in that specific instance, based upon the mandate the congress has established in

the act, and based upon press -- precedent, and if i am fortunate enough to be confirmed as chairman, those will be the guidelines i will use in merger reviews. >> i want to quote from your blog post given this is why my staff doesn't allow me to blog and limits my twitter. you said that merger conditions dish want to quote again -- stab with the largest carrier could have been lifted into subsequent consent decrees for other carriers and even into the terms of scent spectrum auction, end question. under the logic, and i quote, if al-at&t can live with them so can anyone else. end quote. the question i have, that would appear be sort of exactly backwards. isn't it large players like at&t that can have more -- i should say that can more easily handle merger conditions, whereas small and medium size operations without huge team office regulatory lawyers will be

handicapped be regulations intend for a much larger company? >> i think this is one of the reasons that the kind of observation i made that you talk about specifics of that merger agreement that is being reviewed, is important. because these are issues that have to be dealt with, with caution, and with care, and have broad impact, as you just suggested, sir. and thus specific review of the specific issues in the case, guided by the statute, and by precedent, is the role that the agency should play. >> i want to -- you know i represent a rural state, as do a number of my colleagues here on both sides. and i'm firmly committed, as you

know from our conversation to expanding telecommunications opportunities for people in my state. i'm wondering, if confirmed as chairman, how you will approach the challenges that rural america faces with respect to telecommunications issues. >> so, senator, it seems to me that we have made the jump from voice to broadband. chairman genachowski and the commission, with the help of this committee, have made that jump. there is expansion of broadband going on, but there are three goals i think are particularly important. one is the extension of broadband as -- where i just referenced. second is the expansion of broadband as technology allows faster and faster speeds.

and the third is the exploitation of broadband. and anyone without the other is an incomplete solution. and so in rural america or in urban america, it's expansion -- i'm sorry -- it's extension, expansion, and exploitation that are the key to our broadband digital future. >> let me -- if i might just touch on this, spectrum issue a little bit. it's been over five years since the fcc held an auction to put new spectrum into in the market place. the question is, do you think that's an acceptable track record and what do you intend to do to improve upon it? >> thank you, senator. there are a couple of auctions keyed up, not the least of which

is the incentive auction, which will be the first time in the history of the world -- i guess that's a little grandiose statement -- the first time an auction like this has been tried. this committee and the congress have directed the fcc to do that an expedited manner. chairman genachowski set a schedule for that, and if i am fortunate enough to be confirmed it is my intention to move expeditiously to make spectrum available by auction in multiple bands. >> do you agree that the goal of the incentive auction ought to be to maximize net revenues in order to pay for costs and reduce the deficit? >> senator, the incentive auction, as i said, is something

that has never been tried before, and i liken it to a rubic's cube, that over on this side of the cube you have to provide an incentive for broadcasters to want to auction their spectrum. from this side of the cube, you have got to provide a product that is structured in such a way that incentivizes the wireless carriers or whoever the bidders may be, to want to bid for that spectrum, and then in the middle of this, on an almost real-time basis, you have to have a band plan that is constantly changing to reflect the variables going on here. that is why this has never been tried before. this is a monumental undertaking, and all of the

pieces to create value for the broadcastersers and value for te wireless industry, and to pay for first net and provide something for the american taxpayer, all have to go into this incredibly complex rubic's cube. >> i'll take that as a yes. mr. chairman, my time as expired and you have been more than generous. thank you. thank you, mr. wheeler. >> thank you, senator thune. i'll just ask two quick questions and then i think we better ski -- leave and come back. is that all right with you? i have your permission to good ahead with a question? thank you. >> this is seminal in terms of my life and public policy. the idea to bring affordable access of the internet to schools and libraries around the country, the president wants to

make it to 99%. i'm all for that. he re-affirmed the settlement when he called on the fcc to take the steps necessary to make sure all american students, from next generation digital technologies can benefit from them. it was a build statement and a good one. earlier this year i received public comments from all the current sitting commissioners to work with me and update and strengthen the e-rate program. that's not a frivolous thing. i don't make them stand and take an oath, but it's bun by one, yes, no, yes, no, and they were all yeses. that does not always guarantee the results. because of internal problems that arise. but to me it involves a commitment. so, i ask if confirmed, which i'm certain you will be, would

you also commit to working with me -- i know this is a basic request could be to secure additional support and update the e-rate program to fit the future needs of our schools and libraries. >> the answer is, yes. the hint on one word answers. >> can you just give me one sentence of why you said yes? >> yes, sir. i've been a supporter of the e-rate since it first happened, in 1996. and i think it's for basic ropes. as i mentioned in my testimony, when 80% of the e-rate schools say they're not getting the proper band width for their instructional needs, something needs to be done about that.

this is a program that started in 1996. a lot of things have changed since 1996. its not good enough for us to have 1996 textbooks in the classroom. i don't think it's good enough have 1996 connectivity in the classroom. >> good. one more. when congress authorizessed voluntarien sent testify auctions last year it was part of a larger goal of providing funding for the first net. let me just interject this. when we passed e-rate, olympia snow being one of the co-authors, i wrote each of the telecommunication companies at that time, there being more then, and asked them to write a letter to me promising they would not challenge this public policy in court.

i got letters from every one of the ceo's promising not to challenge in court. after which they all challenged it in court. >> they all lost in court. but that is a part of my -- what i bring to all of this. promises made, promises kept, it's important. >> so the auction thing is incredibly complicated, and getting it right is really hard, and for me the successes of these auctions well be judged by their ultimate ability to provide sufficient funding, to fund first net. so question: i know you watched this policy debate closely so you'll appreciate my question. you understand the need of rules to provide sufficient funding for first net. >> yes, sir. >> can you please commit to act expeditiously to comment these

auctions, click calculate though day are, and avoid up necessarily delay. >> i think it's absolutely crucial the incentive auction move on an expedited schedule argentina sir. >> thank you, sir. the hearing stands in recess. >> with your permission can i ask my two or three questions and then i'll get out of everybody's way? is that okay? >> yes. >> i'm going to ask a couple of questions and then i may have more for the record, mr. wheeler. the firsting -- first thing i want to ask is more of a statement than a question. we're getting ready tomorrow for a hearing in this said committee on railroads, and one of the things that came up, getting ready for the hearing, on positive train control, which currently the law says should be implemented by 2015. the commission will have to commit -- will have to complete the permitting process, including environmental impact studies, and historical impact

studies, for 22,000 new wireless poles and towers. i'm told the historic impact studies may have even more resonance here because of tribal lands and other things than the other studies. it's also my understanding that now the normal number of permits is somewhere between, for towers and -- somewhere between 2,000 and 3,000. if the commission goes through the regular permitting process for these poles, most of them located on current right-of-way, it would take ten years to complete. i want to make sure that's on your agenda, you're thinking about that. this is a case where one set of procedures would make it impossible to comply with the other law, and i don't know if you have had a reason to discuss this with nip yet or not, but if you have and want to comment, that's fine. >> thank you, senator. i have not and it is now on the list.

>> 22,000 permits unless there's and expedited permitting process that goes on so that positive train control could happen. on retransmission, mr. wheeler, everyone knows that retransmission is a controversial topic. this committee over the years has spent countless hours debating that. chairman genachowski and his predecessors have always taken the view that the fcc's current authority to alter retransmission consent rules is very limited and changes to the policy would have to come from congress. is that a position you share? >> i look forward to looking into that issue, senator, and trying to get my arms around it, particularly in light of some recent court decisions and a pending second circuit action that has been brought on a related kind of issue. i'm not trying to dive your

question, but i think that this is something that is a situation that is in flux at this moment that i need to get my arm around. >> do you think there's a possible in the court decision that the commission has more authority than they previously thought they had on this topic? >> i would hate to second-guess a court in advance, sir. >> so you're waiting for the court decision? >> yes, sir. >> the third question i want to ask, and would have some in just -- i'll submit questions later. in merger situations, there's 180-day so-called shot clock rule. do you plan to continue the commission's trend of attaching conditions to the merger which don't directly deal with competitive issues? got a couple of examples if you want to hear them. >> i understand your question, sir. it is not dissimilar to the

kinds of things that senator thune and i exchange eddieds on. -- exchange eddieds on. i believe the merger review process is a specific process that deals with that specific case, the facts in that situation, and is guided by the law and precedent. that ought to be the defining four corners. >> competition is the merger review element -- >> public interest and convenience and necessity is the broad term but includes competition, includes consumer protection, includes viability of markets, et cetera. >> thank you. i'll have more questions later. >> the committee will stand in recess. >> thank you for holding the gavel so i could ask those

questions. [inaudible conversations] >> we'll resume. the chairman is on his way. senator fisher. >> thank you for your patience today as you had to wait an extra hour for us. >> not a problem. >> i also want to thank you for coming in, and visiting with me, and i appreciate that you took

the time to have a conversation, and i look forward now to continuing that. as you know, when we met the other day in my office, i explained to you i do have an interest in looking at alternative funding, and looking at a different mechanism for the universal service fund. do you think that it would be one of your priorities if you would be confirmed, and what options do you see for that alternative funding in. >> thank you, senator. and i also, as we discussed, recognize your expertise on the matter, having served as chairman of the committee in the nebraska legislature. i was fortunate enough to be able to serve on the first board of universal service administrative corporation.

and i've seen a lot happen to universal service since then as it evolved. chairman genachowski had significant iterations but seems to me of pressing importance is to continue the evolution of universal service. and to look at that evolution holistically if you will. that we have tended to look at universal service like the old story about the different fellows feeling the elephant. one think it's a snake and one thinks it's a tree, and we need to look at the whole elephant and ask ourselves what has happened since the onset of the program in terms of technology, in terms of market place in terms of business models, that suggest that we ought to be

looking at new approaches. >> specifically for funding, though, what options are out there? what would be a source of revenue? >> i think it's a whole -- the goes into and goes out of, can't quite be separated here, but clearly one of the challenges that is facing universal service going forward is the ip transition, and if you have fees assessed on telecommunication services and fewer and few are things are telecommunication services, that's an issue that has to be addressed about it's an issue that has to be addressed holistic include with both sides of the equation. >> thank you. the chairman felt that we could have this incentive auction done by 2014. do you think that that's a realistic goal? moving forward?

>> senator, i will make every effort to meet that schedule. one of the big frustrations in my current situation is that i know what is on the public record but i have no idea what other things are going on and other decisions and other structural and other facts that are being used by the commission. and i look forward to getting those pieces of information and then making that decision. i think that this is something, as i said to the chairman -- and i reiterate again -- i think this is something that needs to move on an expedited basis. >> that's good to hear. thank you. also you know, some groups are pushing the fcc to use its rulemaking authority to enforce the provisions in the failed disclose act, which would require the disclose sheer of

door nors and private groups that purchase television time for campaign purposes. are you concerned that inserting the fc dr. this politically charged debate, where congress expressly decided not to act -- would that undermine the bipartisan support for the ncc? >> one of the things that i have learned about -- i said in hi statement i spent 40 years in telecom. this issue is not one i've ever seen come on my radar before, and i know that it is a strongly held position throughout this committee. with different positions. and so what i know i'm going to do is i'm going to learn more about it. i'm going to delve into the issue but i'm not unaware of the tensions that this issue creates. >> do you think it would be a proper role for the fcc to

bypass congress, where congress decided not to act? do you think it is within your charge that you would then act as an agency and a rulemaking process where congress decided not to act? >> i think it is the job of the agency to act within the structures that the congress has created. and as i understand this issue and this debate, there is debate on whether or not that authority exists and resides in the commission today and that's what i want to learn more about. >> what do you see is the biggest challenge before you if confirmed? >> only one. >> yes. the biggest. number one. >> well, clearly, you talked about the auction, and there is a -- there are so many components of the effect of the auction that you have to say

that the auction is a top priority. but on a more mega scale, i've spent a lot of time dealing with the fcc in my life. and it is important that the agency make decisions and make decisions in a timely fashion. there's nothing worse for investment, innovation, job creation, all the things that from from investment, than businesses not knowing what the rules are. and so i would hope that in an overarching scope of things, we would be able, with my colleagues -- because i am very aware that this is a commission, not a sole proprietorship. and -- but with my colleagues, we will be able to identify

issues and move with dispatch. >> thank you. it's been a pleasure to meet you, visit with you. i wish you well and hope you'll come to nebraska, as i mentioned during our previous conversation, we are, i believe, leaders when it comes to telecommunications and broadband, and yet we're very, very sparsely populated state in many areas. the population's focused in the eastern part of the state. so, i hope you'll come and see the diversity of our state and how we addressed the needs of the people. >> i look forward that, senator. thank you. >> thank you. >> thank you, senator. >> thank you very much. thank you, mr. chairman. appreciate it. thank you very much for spending the time with me a few days ago and i appreciate your willingness to do public service and also to your supporters and family for their willingness to allow you to do it. i know what that is like and the pressure that will add to your family. so thank you very much.

let me, if i can, pick up on two ends. first, i want to follow up what senator fischer said about rural states. definitely is from a rural state. ours is considered more extreme rural to say the least, and the high cost to do business up there may be the middle mile or the last mile is very expensive. to be very frank with you, we have found not a lot of understanding in total by the fcc in this area. actually there have been documents and reports indicating that it's actually cheaper to build in alaska than the lower 48, which is absolutely false and incorrect. and i guess i want to get your sense of your understanding on the record here of how we can work with the fcc -- how you see the fcc working with these very extreme areas that have high costs to develop and get a

predictable stream? what happens now, as you know, the private sector, you can't make these kind of investments with one year horizons. you have to have multiple years, and we find it very difficult, especially with our mall co-ops in rural alaska or large companies laying new fiber or satellite, because that's all that can work in some areas. can you give me a sense of your feeling and thoughts and regards to able to make sure it's equal access for the rural areas and understand the cost is higher than anywhere in the country more than likely? >> thank you, senator. i do understand that that decision was made about costs and i, too, scratch my head and i am going to learn more about that because it does seem, if not illogical, at least counterintuitive.

>> we would say it's out of whack. more direct. about i hear you. >> i also think that alaska holds great promise for new technologies. as you know, i'm proud of the fact that i, many years ago, turned on the northernmost cell site in north america at point barrow. and i watched and it was an amazing -- i watched how that could change a community. the excitement it brought to a community. the polar bear patrol, which i never knew anything about, that was enabled because of this new technology. >> very good. >> and the promise that new technology, new communications technology, enables is wide in many areas but particularly in states like alaska, it seems to

have great opportunity. >> the fcc has a budget for consultation with tribal nations, which alaska has half the tribe of the nation, 230-some tribes, but across the country a sizable amount. there is -- in alaska, 44 million acres alaska native owned land and the lower 48, lots of tribal land. what -- i want to ask you a budget question but i know the answer so don't want to waste my time. i would rather say, are you willing to help step this effort back into what should be part of the process, and that is, tribal consultation with regards to wireless? if you look at the areas that are the least connected, predominantly it's tribal lands. throughout the country and alaska. yet the fcc wipes out the funding to actually consult to

how to improve that. so give me your thoughts there. >> that's a very easy setup -- >> easy setup question. really -- >> it's hard about it's truthful, sir. it is hard to serve people if you can't consult with them. period. >> i'll take that, we'll work with you. >> i look forward to that. >> today, my colleague from alaska, congressman young, had a -- chaired an oversight committee on the fcc and the universal service fund, and you should watch it. he is very animated because no one prom the fcc decided to show up at the hearing, which from our perspective, alaska perspective, we had people fly 5,000-miles to come to the hearing, when the dc folks are just down the street and couldn't find it in their time, in their somewhat busy schedule -- i get that but for

alaskans to fly that far is amazing to me. as chairman of the commission will would you do everything possible -- i've experienced this where they don't show up because they don't want to have a discussion. well, too bad. they have to have the discussion. maybe it will be uncomfortable. i have a lot of discussion that are uncomfortable. if you are selected as chair, well you ensure wherever possible that members of the fcc will show up at the hearings? i tell you, the -- you have to watch that. not a happy camper over there. i can only imagine. luckily he is not in the confirmation hearing. will you do -- it's critical to have the people at the table. >> it is the same as the consultation issue. out below dialogue, and the answer to your question is, yes. >> very good i have just a few seconds left. let me just say another area we'd love to invite you to alaska so you can -- you've been there, but now assuming your new

role, i'd be very interested in see you participate in coming up to alaska and seeing what we're trying to do with new technology since your time there and you would at least consider that. >> i would look forward to that. >> last, i know you saw it, one of the last questions on the side was about the fcc's role in regards to disclosed act. it's interesting that the fcc, another one -- a few letters off but requires to us put our voice on ads, so it's is logical if corporations want to do these ads, they should put their voice because they're supposed to be people, so i'm assuming they must have a voice somewhere. it's a rhetorical question, and i'm just putting that out. there are strong feelings. if we're required to put the voice on, then a corporation, now defined as person by the

supreme court, i hope they find their voice and put it on an ad. thank you very much. >> thank you, senator. senator nelson. >> thank you, mr. chairman. i want to just point out that i know that there's some interest on this political advertising, and the fact is that there is a petition in front of the fcc that is ongoing and it's not going to be appropriate for you to respond. there's a live petition for rulemaking filed by media access project, filed a year ago, asking the commission to examine the commission's authority under the communications act to require more disclose sure in political advertising. you were asked that by senator fischer, and in essence you

deferred and i think given the fact that there is an ongoing rulemaking that is an appropriate thing to do. and furthermore, i just want to mention that when we talked earlier, we talked about the need of the federal and the commercial users of the spectrum i was pleased to see just this past week the administration announced an initiative that seeks to promote a sharing in order to get more efficient use of the scarce spectrum resource. and so i'm assuming, if you're confirmed, that this is something that you go about contributing to this spectrum initiative through engineering -- your engineering expertise,

and your authority as a commissioner under the communications act. >> yes, sir. if anything, what i have learned is that technology is constantly evolving, and the challenge is, how policy keeps up with what technology makes possible. and i think that is a classic example right there, sir. >> thank you, senator nelson. and now senator cruz to be followed by senator blumenthal. >> thank you, mr. chairman. mr. wheeler, welcome. >> senator. >> excuse me for a second. did i bypass you? [inaudible conversations] >> who did i bypass? [inaudible] >> i will hap defer to --

happily defer to my friend from new hampshire. >> well, thank you. >> mr. chairman, while we have the dealers going on i just want to mention one thing. i understand it's your birthday today. is that right? no? [laughter] >> we won't ask our witness to sing you happy birthday. thank you. we certainly do want to recognize your experience. ...

do you believe that the sec has the ability in lot today to work with net donor states like mine to address what we feel is a very inequitable program? and also, can you share with me your thoughts on what needs to be done to fix this inequity and to make sure that we are further

considering developments in technology as we look at the universal service fund and palin is allocated. because i can tell you, i'm happy to have you come visit some of the rural areas of new hampshire, but despite the fact we're only getting $0.37 return on every dollar that a person in the hampshire put san, there are many areas of my state that did not have broadband access in the rural areas. >> thank you, senator. i am, unfortunately, not familiar with the specifics of new hampshire. however, it is essential that the universal service be looked at as a totality and the distribution as well as the contribution formula is looked at in light of the realities of today. as you and i had discussed, i

was on the first board. i lived through a lot of the early difficulties. and the great thing is that the world has moved on since some of those struggles in terms of what is happening in the market and what is happening with technology. many to make sure that the rules as well. >> and ask for your commitment to work with people like me

2155 to the 2180. the reality is there best paired together, so we are behind. so what do you think in your new role that we expect and hope you

will be confirmed for is the chairman that you would be able to do to move this forward, to really lead a fire under this issue that there is a scarcity of it and we want to see that private sector growth by having more spectrum available and also, by the way, making sure that dot has what it needs to protect our national security. so if you can help me with that, i would appreciate it. >> they key, senator. that is a huge question. let me see if i can parse it out. first of all, the -- i was there when the last federal government spectrum was reallocated to the private sector. i was representing the wireless industry in that situation. i understand the challenges involved. i understand the good faith on

both sides, and i understand how incentives have to be created and concerns have to be addressed. it is not my first rodeo. i look forward to participating in this issue and working with mci a irresponsible for the allocation. the sec is the response will for the assignment. but sometimes a reallocation requires a reassignment, so there has to be a pairing of the exercise. i also want to comment to you and all of your colleagues here at that sinking back to 15 years ago and talking about spectrum with the members of congress, the understanding and the grip of both sides of the spectrum debate that exists today in the congress is far different than

it was, and i think that is terrific because you are the key to keeping those mtia and the administration moving on this. your specific question, yes, they need to be pared. and, as you know, the upper band of that, the congress has said you're going to have this done by february of 2015. of the lower parts is actually part of a 905 meg reach from 1755 on up to 1810. no, it's not. i'm sorry. up to 1850 if i could get my math right. but i think parsing that to deal with the first part of that 1755

to 1780 and then trying to pare it is an important thing that has to happen, and we should not have to wait for everything to be cleared before we move on that. >> thank you. i appreciate your being here know what to think your family for supporting the service. >> thank you, senator. >> thank you. >> thank you mr. chairman. i was going to sing you happy birthday, but the senator still my thunder. there we go. i want to welcome our nominee. we enjoyed the meeting that we had then and now we covered a lot of things. of things the thinking of is the concern to me. consumers' ability to soften that the purchase and use the suffering that the purchase, even if they move somewhere weather service area changes. that is why senator lee and blumenthal and i introduced a wireless consumer choice sacked which directs the fcc to take action to ensure that consumers

in unlocked and keep their funds when they switch carriers. the senator is working on a bill and i'm a co-sponsor of the ticks on the specific decision of the library of congress. and so i wondered if you could comment on whether you agree that unlocking is an impediment for consumers using to switch carriers and therefore a barrier to competition and should become the chairman of the fcc, commit to address some logging. >> thank you, senator. in new the library of congress that this part of a reach. but i am a strong supporter of intellectual property rights. at the same point in time i believe when i as a consumer or you as a consumer or anyone else as a filler commitments and we have paid off our contract that

we ought to have the right to use the device and to move it across carriers as we see fit. yes. i look forward to working on this issue and to resolving this issue to give consumers flexibility. >> thank you. if another topic. the increase discussion about relocating government spectrum users in order to increase spectrum available for good intention. consumer rolls up from -- suggested providing financial incentives to government agencies to participate . the president last week also called for agencies to take a look at their spectrum holdings and identified spectrum for commercialization. what you see as the teacher for government and commercial spectrum management and cooperation? >> well, as i mentioned earlier, i was involved in this very issue the first time ever happened to.

it only works if we created incentives. that case it was the defense department appropriate incentives for the defense department fifth step free of spectrum. those incentives ended up coming down to how can you provide the wherewithal so that their leaving this piece of spectrum to get to this piece of spectrum that they can do it over here with the best technology with digital technology rather than analog technology. that comes down to a cash issue. that came down to an appropriation issue, and the congress in that situation created the incentive by creating the spectrum trust fund and saying that the money raised from the sale of department of defense spectrum were coming in fact, go to the department of defense to help upgrade. so the commissioner made a

terrific observation when she said that we ought to be thinking more about carrots and less about steaks. >> another question. authorizing, the act specifically mentioned that the sec should accord with canada and mexico prior to the option to protect broadcast to why. >> being a state that is on the canadian border, will you commit to work with -- we have been talking a lot about borders the last few days on the floor. but i wondered if you could commit to working with the canadian government as well as spectrum users such as broadcasters on both sides of the border to make sure that the options are a success. >> yes, senator. and i was involved in the digital transition which involves three banding in much

the same way. had to live through those kinds of issues, and another it is possible to do. yes, we will do that. >> in the thank you for your work on that original transition that was my third year in office. our member are concerned we were the that was not going to go well. the delay was helpful, and we got it done without a lot of problem. everyone knows that retransmission consent. now we will have to have questions on that, a hugely controversial topic. we have spent countless hours in this committee debating it. the authority of the sec. did you discuss your views on race transmission policy? >> three transmission was an entirely different concept. today broadcasters are using a retransmission consent as a way of developing a new revenue stream where they can revenue

from subscribers through the intermediary of the cable operator. i believe in that kind of evolutionary market. what does bother me, though, senator -- and i think the commission needs to be attentive to when consumers are held hostage over corporate disputes. and if im47f to be concerned, -- confirmed that will be something i'll be looking at. >> thank you. one last question touched on at some length, the overall broadband issue and i you and i talked about that, incredibly important. kids grow up in rural minnesota and should be a will to live and work their which means there will have to have high-speed internet. one of the things that i think has been helpful, a good sense of that. i hope he will commit going for its mature investments are made to build out our broadband

network. >> is, ma'am. >> okay. will you continue to review the sec u.s. reform and measure the impact on drug and the business? >> i think that you sf reform is a priority of the commission and the totality of the process, so the answer to that is yes. >> thank you very much. >> thank you, senator. you ended precisely on time. what to say to my colleagues, i am embarrassed. first time should say to you had never been to a hearing where we had an hours worth of boats. that's not your problem. that's my problem. >> and if you call on the senator behind another senator boren head of another senator they all the remembered for two

years. >> but not on your birthday. >> he would give you a break. >> thank you. mr. chairman, i promise i won't be precise them time. but thank you very much. thank you. appreciate the meeting that we had in my office. i want to come by again, i congratulate you on the nomination and welcome your family. it is good to see their smiling faces behind you. to sell. >> thank you, senator. >> the question that i have demanded a slam looking for is a better understanding, i cannot think of an industry today that has more potential for growth than any other industry in america today, technology. think we're going to create more jobs in this sector probably been in the other industry in this country in the next five if we do our jobs right. so the question i have comes to mind, are you familiar with some of the reforms that came out of

the house during the last cycle with the fcc? >> just a lesser. >> congressman mauldin was the author of the particular bill, and i would like to highlight just a couple of pieces in see how you feel about them because i think it is important. think it will be something you will be discussing in the future. i believe in his legislation to my to give the industry and the commission to work better together. at times, and you may know this, having your background and experience, the sec -- the fcc would not go to the industry and ask them if a new regulation actually made sense. i think that is where walt was trying to get to, to make sure that they had an opportunity to talk to you. do you have any thoughts on that? >> yes. first of all, -- >> do you agree that has been an

issue in the past? >> i must say in all candor, cirque might not believe that when my job was advocating before the commission that there was the challenge of getting my ideas hurt i do believe that it is essential that the commission have an open process for the collection of ideas and templates. melson just want to respond to one thing you said a moment ago which still has meals startled when you use the term the wheeler commission which is the first time i've ever that, particularly from somebody like you. it is an honor to have that kind of monitor, but also want to emphasize that it is a commission. and i don't believe that i am

bizarre. i know that it is a strong -- i understand their responsibilities of the chairman, but i'll also think that this is a institution that needs to work collegial lee and together on resolving the challenges. >> one of the issues that wall that had in his legislation that i agree with a modicum of the previous chairman disagreed with weather not to do an analysis every time a new regulation was proposed. to create or kill jobs? what are your feelings? >> well, one of the things that you have proposed is to -- is to address the question of whether there are too many diverse

reports coming out of the sc -- fcc and too much time being spent on too many reports. i think you raise an incredibly valuable point when you ask that question. and i think that inside the construct of whenever the mandate of reports that the congress decides they want the commission to have, that kind of an issue falls. >> i appreciate your response to that is obviously we share that. larger conditions, also something that has been brought up several times with both senator theremin and senator blonde to. regarding their questions on merger reviews. no, you have indicated three times the merger reviews should be based on facts. again, your broad post dated september 2nd 2011 said, my theory was that conditions ultimately oppose by the government should not only

establish rules on at&t, but would expand from larger carriers to all others. now, i see two different theories here. >> but only one set of law. in a hypothetical using it is possible. if i am fortunate enough to be confirmed, i am guided by statutes, president, and the facts in the case before me. >> okay. >> let me ask you one more question, and this is one of the complaints that i have received in the past. can you assure us that you have no laws between midnight and 6:00 in the morning? >> she will ask you that it is rare that i am awake past:00 tonight. and i don't know the reference you're making, but it certainly

would not be my goal to be rolling votes of the time of night. >> thank you very much. thank you. thank you. >> thank you, mr. chairman. deja vu all over again. thank you for being here. i enjoyed the time. i want to cover a number of issues. i want to start with the spectrum. it is my view that the federal government should own or control as little specter as possible consistent with national security and law enforcement. do you agree with that principle? >> if i could tweeted a bit, the federal government's should be efficiently using spectrum to a point where it uses the minimal amount of spectrum necessary to

do its job. >> what do you see -- as you know, there has been a long history of reluctance by those federal agencies that have control over portions of spectrum and a long history of reluctance to relinquish that control. what do you see as the most effective tools congress and implemented to shift more and more of that spectrum into private hands or it can generate jobs and accommodate growth? >> that is an excellent question. thank you. and i think that there are many. one, as i indicated before, the bright light that you are focusing on spectrum now is so different than the days when i was negotiating with the federal government over spectrum. that can only hope -- help. secondly, i think that i would hope that part of that bright light would be an encouragement

to think about how new technology has changed the use of spectrum. doing things the way that we have always done them is not the answer for tomorrow. and most spectrum has been allocated with analog concepts in mind. living the digital world, we can think differently. and thirdly is the issue of creating the necessary incentives for the federal government's users to become efficient and to want to put spectrum to other uses. and i think all of those reside here. i think if i am fortunate enough to be confirmed, serve, i will be forthright in calling for these

kinds of changes, but i think that you will, frankly, the once you actually are in control of that. >> i look forward to hopefully working with you to accomplish that. >> thank you. >> let me shift to a different topic which is, as you know, and recent months to of the president's cabinet nominees have sent or you were sitting. i ask both of them if they would commit. my top priority is economic growth. regulatory reform, reducing the burdens of the regulation on small businesses and job creation. so i asked each of those two nominees if they would commit within the first hundred days to identifying at least three existing federal regulations that should be modified or repealed because they aren't being job creation. one of them agreed to do so. a second one actually upped the

ante and said that he thought three was insufficient and agree to find ten instead. so i want to ask you this same question. >> i don't want to get into the game here. i will see is ten and race and ten. >> i would welcome. >> i will take a slightly different tact. as i have been preparing for this hearing, i have been asking myself that question. i wrote a book on lincoln's use of the telegraph. kind of fascinated with the first electronic communications network that we ever had. i discovered that the telegraph rules are still in place at the sec. i would like to take a look at weather that makes any sense. and that is my philosophy, looking at all of those rules with that kind of an eye. >> i appreciate that very much in doubt that we can work together in particular at looking at getting rid of the

telegraph rules makes sense, but in particular obviously targeting those rules that are really impacting productivity and job creation is, i know, a priority of ours. i hope the we can work together on that. i want to briefly touch on the question of a market bounce. you mentioned contract law which is obviously a matter between private parties. in your opinion should federal law prohibit or criminalize consumers on locking their phones? >> i think that a consumer has -- if the consumer fills their side of the bargain they have the right to on lock their phone >> would you support of prominent exception to the mca for cell phones and other wireless devices? >> i think that we -- first i think it is an extension now that has caused all kinds of problems that we need to deal with. i don't right now, sir, know

whether it is a permanent exemption, whether it is a rewrite of the copyright act, or what the appropriate solution is , but i do believe that there needs to be a solution, and consumers should have the right tom locke their phone after they have lived up to their side of the deal. >> terrific in delacorte to working with you on that. the final issue i want to address is one that has come up already. as you know, there are few if any issues that inspire more passionate partisan divisions in this body. this body has repeatedly failed to pass the disclose that because of substantial numbers of members of this body believing it is unconstitutional and bad policy. in your judgment does the sec have the authority to implement the dispose act or to otherwise regulate political speech? >> as i said before the men that is an issue that i look forward to learning more about.

there is a pending proceeding on that exact question, and i need to look at that proceeding and become informed, but i do not miss the expression on both sides of this as to the strong feelings. and of this is an issue of tension. >> as you know, every republican on this committee along with minority leader mitch mcconnell sent a letter to your predecessor on this issue. you and i visited my office. ♪ you need to study the issue more i would ask you to submit in writing in answer to this question. i would note, as uni visit privacy, to the privately, this is the one issue that has the potential to derail your nomination. i don't want to see that happen. i think the commission as an important role, but should the commission leaves several and get into the business of regulating political speech, we have seen with the irs what can

happen when members of congress urged the executive branch to begin playing politics. and so i look forward to reading your written response in terms of whether you believe the commission has the authority to implement the disclose that or regulate political speech. >> thank you, senator. >> thank you. senator, bad news. sentiment fell walked back again. perhaps you might want. >> mr. chairman, thank you. >> if the distinguished senator from indiana has the time constraint i am happy to yield sam. >> i do. i have a ratio of five which means i will take less than my seven minutes. >> with your permission, i will yield to my colleague and friend >> i appreciate that and zero u.

one. >> he said this is i your first rodeo. is not mine either. you bring a lot of experience to the table here. a lot of knowledge about the relevant issues. you had a good career in this. my second time back, part of that time i represented some clients. when i came back here i think those clients thought, oh, boy, we have someone there who already knows the issues. we know where you will come down. i was able to inform everyone of them that i am starting with a clean sheet. people will have to come and make your case to me as if it is a brand new issue. my representation of view does not have a bearing in terms of how i'm going to decide going forward. my constituents came to me and basically said, you know, you voted for our position or against opposition and we're wondering if your still with us or against this.

the same thing. clean sheet. i am hoping that -- i think that is a way to approach it. i think that is the way you approach your job. that base future decisions on the fact that you took a different position in your private life or that you came to a conclusion that may not match up with the current situation as it exists today. open-door clean sheet when clients come for regardless of what their past positions might of been. so you don't have to affirm that come but i am just suggesting that it went very well for me and i hope it does for you. >> senator, thank you for bringing that out. secondly, for your advice and counsel. i was an advocate for specific points of view. i hope by was a pretty good advocate. i remember our times working

together. if i am fortunate enough to be confirmed, my clients will be american public. i hope that i can be as effective an advocate for them as humanly possible. >> i thank you for that statement. i will let it go at that, and i think my colleague. >> thank you. >> thank you for your willingness to serve the american public desert climate, which i believe is superbly important. the beja say from my par with all due respect to my colleague from texas to my don't have an issue that would derail your confirmation, and i hope you will adopt the approach of considering carefully and cautiously and deliberately all of these issues once you reach

the position if confirmed that will best serve the american public and will be too willing to listen to what is presented to you. i think that listening is very, very important in this job. so in that spirit let me just ask you first about limits on spectrum consolidation which is very important to the public. the fcc is currently revisiting its antiquated and inadequate spectrum screen, updating the screen is important, not just for this upcoming off -- auction, but also to ensure that the wireless market remains competitive for years to come. as you know, the department of justice recently wrote the fcc to weigh in on how the commission can structure a spectrum policy to best encourage competition and promote consumer welfare, and it encourages the sec to create a spectrum policy.

in order to promote more competitive discipline to more competition from more choices. and i would like you to agree with the department of justice a vice that the fcc should create a spectrum policy that specifically seeks to encourage competition in the wireless marketplace. >> senator, the act on the incentive option was very explicit. said the you could not conclude -- preclude the company from participating in it also said that the commission had authority to establish the rules for various plans. i remember the first spectrum auction when i was one of the guilty parties saying, you have to do it this way or the sky will fall.

and i know that that always happens in this kind of situation, but i believe that there is a responsibility to the congress that they have given the commission to have an effective option and to preserve and protect competition which includes smaller players which are so often the innovation engine. >> so that would mean that they should have access to the spectrum. >> i think that is a key issue that the commission has to consider when it looks at this band plan authority that the congress has. >> and a key goal. >> yes, sir. >> thank you. you think the sec ought to account for differences in quality between different spectrums, particularly low and high frequency spectrum? >> i am very aware of the

different propagation techniques i would be disingenuous if i told you i had answered the question. >> but there are differences. >> there are differences and propagation characteristics. one piece of spectrum is not the same as another. i have not reached a policy decision on how get to balance that out. >> it certainly is a relevant -- >> it certainly is, sir. >> let me switch to another consumer issue which my colleagues have not raised. that is blackout policy which uni talked a little bit about or alluded to when we spoke. as you know, few issues concerning the fcc drive sports ban consumers -- i was going to say drive them crazy but upset them to use a more temperate way of putting in as a current lack of policy practice.

so my question to you is, what can the fcc due to decrease the frequency of blackouts and make sure that consumers are not stuck with blacks -- blank screens when the want to watch sports contents. >> as you know, there is a proceeding before the commission right now to eliminate the so-called sports by cal greuel which derives from the days when decisions are made on the basis of what broadcasters in the market had contracted to. the market has moved since that time. the market has a plethora of new players since that time. the latest example of which is verizon wireless paying a billion dollars to the nfl to be able to jetstream nfl games on

to mobile devices without the blackout revolt ever being considered. so clearly this is an issue that is ripe for a commission decision because they're is a proceeding at the commission. i don't think it is appropriate for me to opine at this point in time, but there is an evolutionary process. >> you would agree that the commission should move forward with the notice of proposed rulemaking concerning the blackout? >> they're is a process in place to deal with this evolution, sir >> let me ask you, finally, just generally, if you consider the array of consumer protection issues now before the fcc, have you settled in your mind on several or a single one or more

than a few that really should be priorities? >> that is a legitimate question, and one that i cannot say that i have gone abc d. however, i have thought about the priorities that i want if i am fortunate enough to be confirmed the want to consider. and there are three. if the first is a consumer protection, as i said in my statement, the telecommunications act makes it abundantly clear that the first task of the s -- fcc is consumer protection. this second issue is competition as i said in my statement to miami and unabashedly her in competition. and competition sometimes also need some help to make sure is that it is there.

the third issue that i would have as a priority is predictability, decisiveness, dispatched to my ability to know what the rules are because, frankly, whether a rule is right or wrong, knowing what it is is more of an economic incentive than existing in the, oh, my goodness, what are the rules right now? and so it is those three things that i would be guided in as i go through and parse through the kinds of issues. >> thank you. thank you, mr. wheeler. thank you for your answers to my questions and your willingness to serve. >> thank you. >> thank you, senator blumenthal. >> senators got. >> thank you, mr. chairman. good chatting with you. >> senator. >> it looks like the broadcast

consumes a lot of your time. part of that process, not only does the support innovation and creativity but will be fork to the part of the future engine of our country economically this seems to be concerned as it relates to the reid packing process. so two questions. one would become as you discuss with me how you would anticipate allocating every pecking funds provided by the legislation, 75 billion are so, and how would you anticipate handling a low-power tv stations in the repackage process? >> thank you, senator. and i cannot give you a specific example, a specific response to that. i hope it you can sense my frustration as to why cannot because i really have not been able to look beyond the public record on this issue. however, i mentioned to this senator earlier on that this

hearing -- this proceeding and the auction is like a rubrics -- rubik's cube where you have to provide on this side incentives sufficient for broadcasters. then you have to organize it in a way that makes it valuable so that whoever is betting wants to bet on it. and they're glue that is in the metal, they greece and the blue, if you will, that is in the middle is how you do and decide how this works. and so i agree with you, sir, it is crucial. i also know from my experience on the digital television transition, the incredible importance and irresponsibility

that acis to somebody who is, perhaps, may be regulated on how service areas and band plans are allocated or decided as you work through this plan. one of the big challenges that existed in digital television transition was how you make sure that you have similar coverage areas and all of these kinds of things. and believe it is possible to find the right solution. it is that easy. wish i could give you the specific cancer. i don't know what it is. i do have the experience to say that i know it is possible to reset. >> thank you. one of the things that the current commission is wrestling with is whether or not to weaken its broadcast decency standards. this is going to be an ongoing

debate, it seems. the public is engaged pretty intensely. they're state as well with over 100,000 responses from the public. i know that the last time the decency enforce the standard was considered back in 2004 it took about eight years for them to comfits to a decision. my question to you, mr. chairman, where we take the broadcasting system problems? >> thank you, senator. that is a very relevant question as you heard me say early on when i was introducing my family, i have three brand new grand kids. i am old enough to when i see some things, i grit my teeth and say, does this -- is this what i want my grand kids to be seeing? whether it be violence or obscenity or indecency or whenever. at the same point in time, as

you pointed out, the courts have been pretty specific in restriction. i do believe, however that it is possible to call upon our better angels with some white skills. i remember newton minnow talking about television is a vast wasteland. he did that without regulatory authority. it caught the public attention. maybe it is possible to do the same kind of thing today and say can't we do better. >> i like your optimism. let me ask you the question.

in 2011 you chaired or were part of the advisory committee. certainly the industry has come a long way in making the necessary investments in capital to help us shape the future. how do you envision the transmission taking shape? do you believe a sunset of legacy is still possible but 2018? >> so, i was the chairman of the committee that started the ball rolling. >> exactly. >> and that think that there are a couple of things. one is, it is going to happen with or without this. a question is, how do we mitigate the impact of it? because we have all lived through other transitions. we lived through that broadcast to cable transition. we lived through the wireline to wireless transition, and there were bumps along the road and all of it. i think that -- that what the commission can do in -- and if i

am fortunate enough to be confirmed by hope that we will be allowed to lay out some kind of stratagem that says that we have to progress through this with some kind of planned structure rather than it growing like tops the and just happening here and there and one person tries this because that is what causes the dislocation. that is what causes the harm to consumers. that is what causes the disincentive to invest. and so i am hopeful that we will be able to address the broad spectrum of issues associated with the ip transition in a collective and logical way. >> thank you.

>> thank you, senator scott. >> thank you, mr. chairman. i stayed around just to wish you a happy birthday and to ask mr. wheeler some questions. i am very glad that he brought up newton minnow. our member that story about newton minnow taking president kennedy -- maybe with senator kennedy at the time. why are we launching satellites instead of people? and minos said because ideas last longer than people do. and that think that is a very important question when it comes to media and media consolidation i want lots of ideas. i don't want ideas packaged up and shoved down local throats of individual broadcasters saying, this is the news and that is the way it is going to be. one question i have for you is this issue of media consolidation and your role on the fcc. you know about previous chairmen

and their attempts to advocate for rules. then senators obama and biden joined us in disapproval resolutions. last week that newspaper announced it was going to purchase 23 television stations which includes cain and seattle, ackerman spokane and pr w in portland. of the purchase is subject to the approval of the -- above the fcc and doj, i think that connect is trying to a basically use these ownership rules, use the old shared service agreement as a way to get around those rules. so i am very concerned about that whole issue. do you believe in making it easier for owners to own television stations and radio stations. this market is what is wrong with the industry.

>> senator, i understand the seriousness of this issue. and i have long been an advocate of diversity of voices. on this specific issue that you just raised i also note that the chairman has asked the gao to opine on this issue. and i think that is appropriate, called for, and i look forward to their opining, their opinion. i think you said the key thing. when the commission looks at these issues competition, localism, and diversity are the issues that should be the touchstones, not business plans.

>> he think they could use those . >> he basically believe this is an issue that the commission is to give more attention to to assure members of congress that otherwise will have another the super resolution. this newspaper industry and of itself is having problems this is why shuttle of the consolidation immediate save the day. trying to get your thoughts on that.

>> i am a business person. and it has been my experience that the weights the pro-business when they are challenged by new technologies is to embrace those new technologies, and it if that is a way of working yourself out of this kind of situation, that's the best way of working yourself out of this situation. >> you don't run to the explanation of let's just allow for all sorts of integration? and thereby throwing out these very legitimate concerns, over consolidation in the market. >> i am -- i am -- i am specifically trying not to be specific on that because i want to become more informed.

i do understand the seriousness of this, and i understand the priority of competition, localism, and diversity trumping everything. >> okay. on the progeny petition, are you familiar with that? a lot of discussion about whether interference was going to happen are not. will you pursue an aggressive approach to make sure that you are monitoring compliance so that we see what is happening? >> the answer is yes. if one of the solutions to the spectrum crunch is to use more -- uses spectrum more efficiently that inherently means sharing, whether this geographic sharing, time sharing, or sharing sharing.

that's why you have to ensure this is happening. on this license spectrum's i heard a lot about the spectrum crunch. >> i'm a supporter of on license spectrum's, i find it no worthy that unlicensed has been the rescuer of lessons in some many ways that a third to three-quarters of the wireless data, the mobile data out of the smart phone ends up going through on license spectrum's rather than license spectrum's. unlicensed is the home to innovation and therefore we need to have unlaces spectrum.

>> you support a broad space is? >> and at the same point in time , i recognize that the job of the commission is to balance out the demands between, okay, here is less is the you can sell that will find first met and other kinds of activities and here is on license that you cannot sell. how do you reach the balance? i do not take lightly the significance of unlaces spectrum? >> thank you. i see my time is expired. >> there will be a brief second round on my part. you know that half of all

broadband subscribers in the united states are subject to some kind of cap, a band with cap or usage based billing policy caps that a lot of people regard as consumer and in the end inhibiting more internet use which is the key to a lot of people communicating with each other and learning about the world and also more expensive because of the impact on competition. as you know, congress recognizes the need for more information about what the situation is locally, with the state of competition is, how these taxes impact competition. and it recognizes that when it passed the broadband state emperor enacted 2008 the fcc recognizes the fact that in the national broadband plan and the

department of justice recognizing when it submitted comments to the fcc and how best to promote more competition in the broadband marketplace. i guess my question is, do you agree with recommendations of the national broadband plan and the doj that the fcc should be collecting more broadband pricey information to facilitate an understanding of what is happening, how these caps have the central lack of competition and other factors that impact the consumer use and competition >> thank you, senator. i am a data center kaj. i come from a management background. the thing that they used to be into you in business school, if you can measure it you can manage it. i believe that. believe that you need to have what you're talking about.

>> thank you. >> that answers my question. thank you very much. >> mr. chairman, i do have a question every are allowed a second. >> go head. >> thanks. >> at the birthday, mr. chairman. >> mr. wheeler, one of the issues that we have and the northwest is this issue of rural call completion. we still have a number of constituents who feel that to meet its hit -- to many of their calls just don't connect. do you believe this is a concern? do you really remain an issue that needs to be addressed, something that the fcc can do with enforcement action? >> yes. and come as you know, the situation is that some carriers, long distance providers have

been subcontracting out and not doing the appropriate kind of oversight on the quality of service delivered by the subcontractors. they should be held responsible for that. this is an enforcement action. i know that the fcc has taken one enforcement action already on this and if i am confirmed i look forward to investigating the need for there to be others. ..

>> the answer is yes to be aware of that situation. >> we will support the office is policy? been back that is a very clear answer that yes from the activities of that office. >> thank you mr. chairman. >> says thank you senator.

actually the note that i was writing which i will give her, anyway simply stated the point* that what you heard this afternoon this is some ideology but succinct questions about policy questions coming from the experience of the folks on this committee who has been here long time and your very smart. people want on this committee. there is a long waiting list and there is a reason for that because we have a broad jurisdiction and it is a broad jurisdiction but things don't happen like this. i cannot see what time it is but my birthday will be spent with my wife and the

board of directors for dinner. [laughter] i was hoping to catch the second braves be but that is another matter. [laughter] but the staff is central to that and it is something a very much appreciate to be chairman of this committee. it is a wonderful job but you presented yourself extremely well and under a lot of pressure and with intensity and firmness to give your total concentration to would never question was asked. i will not bring up craming but i will thank you. is clear that the role is

important we need a strong chairman with strong commissioners we need to feel the energy of that chairman and a delay beyond what is necessary is something we should not have to put up with. we do a lot of oversight and it is good because we don't do it just for the sake of that but i thank you will be confirmed and your up to the job but for those staff still remaining, the record will remain open for one week and with that this hearing is adjourned with thanks to you if your family and also attended. >> thank you, mr. chairman.

[inaudible conversations]

>> let us not be blinded to our differences but direct attention to our common interests and the means by which those can be resolved. and if we cannot and now our differences, at least we can help make the world safe for diversity. [applause] >> all men wherever they may live our citizens and therefore as a free man i

take pride in the words. [speaking german] >> they see a much different president kennedy and then a different one again at the same time preparing the ground and with his treaty that was agreed to in the fall of 1963 while at the same time building up fences seeking a way to peace with the american university speech.

>> [inaudible conversations] >> we will come to order. without objection members of the full committee and they may sit on today's hearing. without objection the chair is authorized to declare a recess of the subcommittee at any time. hour hearing today is on the budget review and i yield myself five minutes for the purposes of the opening statement for almost three years ago under the enactment of dodd/frank the

consumer financial protection bureau was created to regulate and supervise the offering and provision of consumer financial products or services under the financial law but prior to its inception when still an idea of a harvard academic the proposed bureau was already compared to an agency known as the cpsc. elizabeth warren stated just as a consumer to protect goods to support the competitive market we need the same for consumers of financial products within a new regulatory body to protect consumers to use credit cards, mortgages, car loans and other products. however, the vision proposed was for agency very different than the cpsc.

while the cpsc has three commissioners, the bureau has a single director structure. and while the cpsc is subject to congressional appropriations process and the omb budget process, which our witness today is very familiar with, the bureau is not. in the end of the single director can disregarded vice and manage as he or she wishes. if they have little accountability to the administration or even in the congress in his or her budget it is secure. as a result is to come as no surprise it is operated and less concern for fiscal discipline they and is inappropriate for taxpayer funds. the bureau need not listen to basic advice from the

office of manager and budget on may 31st of this year omb issued a controller other to for agencies of which elman the has jurisdiction with the waste and abuse of gsa and ira's conferences, this was the least we could hope for but based on dodd/frank the bureau can simply ignore the controller alerts because of results of lack of accountability certain expenditures have been called into question such as the 55 million set aside for renovating the cfpb headquarters building down from the white house that is more than the entire in annual construction and acquisition budget for the gsa for the totality of federal buildings. the bureau has also refused to participate and the

employee survey with the specific recommendations the bureau of joined the survey which 98 percent of executive agencies participate. and has since decided to do its own by taking this action now being ranked alongside the other 90 percent of agencies that do participate. and the in-house employee survey wrote regarded significant concerns of the staff and management. is provided only 35 .6% agree with the bureau take steps to deal with a poor performer who cannot or will not improve''. only one-third of the staff of the bureau of -- believe the staff is providing real accountability which is a major concern. also claims that it invests

in real class training for its employees. however its own survey says the only 38 point* 8% of employees agree that the training they received was sufficient. that sounds like anything but world-class. last week it is readmitted they're losing staff faster than they can replace it and those management techniques benefices to ensure all employees were considered equal stakeholders and a former bureau official expressed concern that while it is good policy with no exposure they'd want to drive policy decisions because they understand the risk involved so those with little training and experience are seated alongside with greater training and experience. these weaknesses could

reflect a broader management problems. last week that cfpb employees joined the national treasury employees union, the same one noted for representing the irs employees as well. when considering this for lack of accountability to the american people i am deeply concerned cfpb present a substantial risk to the taxpayers. and as the cfo i welcome our witness today and look forward to his testimony. know i will yield to the ranking member of the full committee for three minutes of. >> thank you very much. let me first begin by expressing to allow a director condray to appear before that committee.

the mere notion that some legal scholars say that his appointment does not make it illegal at all. contrary to oversight has been forthcoming about the budget and it has testified and the director himself has testified before congress 13 times but the cftc operation and budget with the gao has been for audit for financial transactions to be held accountable.

but the decisions to bart director condray from testifying to deny his confirmation with the very actions of the oversight to create'' a regulatory issues of the consumer and industry. on april 23rd we scheduled a hearing to allow the director to give his testimony as required by statute. in the aftermath is now

conducting oversight as is the task of have liked to commend director condray for his responsibility. budget cfpb has accomplished a great deal under his oversight. i yield back my time. >> and now mr. green you were directed and. >> figure as well. it is regrettable that when it comes to the cfpb generally speaking there are two schools of thought. should the cfpb bb independent of politics and

accountable or be tendered on politics and accountable? or independent through the occ or is it depended on politics which because of a point* impolitic should be independent similar to the fed or the fdic? they're funded without congressional approval. or dependent on politics like the sec and cftc which are funded through congress and consistently content they are underfunded? i think there needs to be a

watchdog that is independent from politics. the cfpb should be and is accountable. is accountable and this is why the director can be removed. this is why the cfpb pass to consult with other regulatory agencies and this is why it must do a cost-benefit analysis and white testimonies and what he has had 36 appearances and this is why has the existing rules every five years. this is why it can be vetoed by other federal regulators. this is why it is subject to review. this is why we do the auditing of said gao, and an

independent audit mandated by congress along with it. and independent of and accountability -- accountable consumer protection bureau. >> the member yields back now we will recognize our witness member mr. stephen agostini the cfo of the consumer financial protection bureau since 2011, previously he served as the chief financial officer the role of purchasing management the role started in 2010 and also served as the budget director in the city of philadelphia and prior to that cfo for they economic administration at the commerce department. mr. agostini thank you for being here today we will recognize you to summarize

your written statement we have a bright teen system that you are aware of it be with you five minutes to summarize. you are now recognized. >> think zero distinguished members of the subcommittee we're pleased of the oversight hearing of the consumer financial protection bureau budget a workforce we appreciate the opportunity to testify before congress for the surge 36 time today i am the chief financial officer of the bureau. my name is mr. agostini it was created in the dodd/frank active the wake of the financial crisis. we're the first federal agency and the object is to protect consumers in the financial market. congress established precedents in the process

and this ensures full independence that it carries out statutory responsibilities with consumer financial products it is provided for independent funding to allow for long-term planning and to guarantee with so lot. the 2013 is $541 million as supports ongoing operations capital, technology as well as consumer research. the 2013 budget year in washington d.c.. the 2014 estimate has investments in technology and staff while the budget is small we're committed to using resources wisely and

we rely on decisions and will continue but it provides additional resources for our programs over the next two fiscal years also to support additional sap staff and development. also invest in those offices such as the offices dedicated for older americans. the have ventured it meets its deadlines to change millions of dollars of restitution with tens of thousands of consumer complaints we continue to retain staff as we build the bureau. so far we have hired new recruits in will continue to

staff to carry out the mission to make sure the markets work for consumers. in order to ensure this strategy it has a list of the gao and inspector general and board of governors and the federal reserve system. additionally also bitterly audited that complied in 2011 and 2012. the bureau committed to do transparency with those opportunities and contact war data. the budget web page includes information about the budget in quarterly budget updates as well. where committed to delivering value to the

american consumer the salts are also a portrait with that in my don't like to share additional numbers. $125 million is the amount of money refunded to consumers who were subjected to deceptive practices. 6 million represents more than would have to 30,000 for every state around the country. 31,000 represents the number of those service member affairs and chairman and members of the subcommittee figure for the opportunity to testify before you today to provide oversight and i'll be happy to answer any questions.

>> the key for your statement and testifying i now recognize myself for five minutes for questions. as i referenced. >> that is correct. >> at 0:00 p.m. does it have authority over the budget process? >> yes. and you engage with the would be through the process? >> yes we do. so does omb have a similar function? >> is that no? >> i can tell you that does

not. >> so others have a check and a balance with the omb process? but section 1017 as referencing for any obligation on the part of the director with the director of the omb or any other operation in paragraph day or any jurisdiction or oversight of the affairs of operations of the bureau is that correct is that the point* you are referencing? >> okay. effective branch budget process you are exempt from the function. >> we do cygnets -- said it.

>> it is submitted but you drive down the fund from the federal reserve. correct? with the federal reserve is the process by which they say yes or no? it also specifies that is how much? of the federal reserve. >> that is not a process for the funding of the bureau. >> $600 million? the other agencies goes to the process.

and while i find it relevant in with that invitation to come before this committee with congressional oversight , you are exempt under this act from coming into this body. correct? >> it does have us come before as well as congress with the report to the appropriations committee. >> so they accept the report if they demand teaching is what can they do? can they legislate withhold funds ward give additional funds?

but that tab seems like a pretty large way with the appropriations process obviously the inspector general has some oversight of the agency your inspector general is to? >>. >> oversees the federal reserve board? >> that is correct. but what it seems like to be and what becomes very clear is how your agency has been spending as well as other questions is that was a risk but to have an appropriations glad is a

deep concern but that hasn't been mismanaged and overspending by agency and not appropriate checks and balances that other agencies have to submit themselves to. you're recognized for five minutes. >>. >> 84 being here. i am very much interested in finding out the regulators

subject to the appropriations process. >> i am not an expert on the other agencies but there are agencies that receive, like the fcc and fdic, funding from specific dedicated sources that are not appropriations. there are instances but as is the case with us that not appropriated money for the operations of that entity. >> but here's the question as some suggestions we subject the bureau to the appropriations process. and to regulate through the process and i could probably get that answer up i am not

sure that we can find but that should be subjected to the budget process. but you don't know of any so with the benchmark stipulated in the act you must report in terms of salaries in terms of funding to your point* so the big

concern legitimately is i have not heard anybody say to express consensus with the deficit. but considering budget constraints, if you have to make a choice over what budget item you choose? >> stood to as we still build up our capacity as

with the american consumers as well as regulatory responsibilities, it is the case that we are very fearful stewards of our funding and we make sure it is managed appropriate and if there was the desire to reduce or in some other fashion to screen further our funding to make decisions of what we would or would not do, i don't have the ability to tell you that what those were or what they would be but we have to go back to look at that. >> but the bureau is struggling right now so you are re-examining the agency the budget right now.

>> congressman we're always looking at the budget of how we spend our funds on a monthly and quarterly basis to ensure we are effective stewards of the funds so we're still building the agency so we're still trying to fix the building infrastructure necessary. >> so without the filaments so not to have the budget to carry out. >> your out of time so i will now recognize the vice-chairman. >> thank you. and with this committee in writing we had asking

additional details of the cfpb budget and unfortunately we did receive three-quarters of a reply but we did not receive the details that taxpayers deserve especially when the agency has been given the ability to spend the funds without congressional approval or authorization. so even more important if it is the independent agency you can release this without prior previous approval from the omb source of major we get a copy of those to you and ask that you take a look and get them to the appropriate people to give us information. >> i will. >> thank you. also i interested to learn about the substantial amount of money that cfpb has spent on employee travel that will amount that nearly $12 million by the end of the fiscal year. this is the expense that requires procedures and

controls to prevent waste and abuse that we have seen in other agencies across the federal government program currently working on legislation to require federal agencies to consider alternatives such as videoconferencing as a way to reduce spending so doing you have any reason why you could not significantly reduce what you have the space item right now is travel as opposed to louvre videoconferencing it is clean air and cleaner and better for the taxpayers. >> congressman, we do take advantage of videoconferencing when possible. with the technology that allows us to do but i would point* out i'd like other regulators we do not have

offices in cities across the country. there was a conscious decision that we would not have cities across like fdic or federal reserve so with the work force the ability to do the work. >> are you aware of the cftc -- cfpb analytics? >> the travel request are approved by a supervisor without any knowledge of the estimated dollar amount to be expended on the trip and expansion travel vouchers are not ask for approval by the supervisor? have you resolved this control failure yet?

>> congressman we go through rigorous process of reviewing both the authorization for travel as well as the vouchers. my office has a very significant role. i have spent time doing that myself. we're only looking for the approvals we think there are improvements we could make but we do subject all of those vouchers and authorizations that requires us to talk directly to the supervisors that they can assure us it is relevant. >> the cfpb continues to arrange a trip without the supervisors knowledge of the cost of the trip? that was raised in the audit >> currently they do sign off on the trip but we will make modifications to look at the budget. >> as the cfo do you look at the failure managed to have knowledge of the travel

costs to be as significant failure? >> my office does the review with the supervisors but there are improvements we can make so it will be an improvement. >> i appreciate your concern and willingness to look at to convert to videoconferencing and we will get those letters over to you. i yield back. >> ms. waters is recognized for five minutes. >> thank you. i would like to ask you if you are aware that the

director intends do testify before congress at any time and are you aware that he said eckersley say he can testify before congress had any power in before the house committee and subcommittee and the house financial-services committee. are you aware of this? >> yes. >> are you aware he is riveted from testifying before this committee because he believes the appointment is unconstitutional? >> type understand he is not invited to testify.

>> thank you very much. i put that in the record he will not testify as the staff that he was not invited. having said that, i would like to ask you to questions about the budget. as i understand you have the smallest budget of all of the banking agencies of the federal government. is that correct? >> we do have one of the smallest. i do need to do research but under the regulatory agencies redo. >> i also understand your budget is capped at 598 million? >> we do have a transfer tab is 598 million i'd like 2013 and six and 8 billion in the

subsequent year. >> when i compare that with the 209 -- 2009 budget at 775 million that is 56 billion for those agencies. are you aware of that? >> yes ma'am. >> i am also made aware you have not utilize the full budgetary authority? is that correct? >> that is correct. >> why have you not use this authority and the bureau will continue to operate in the budget? >> congressman -- woman we

have been building the agency. and we have gone from 123 billion in spending up to 300 million and we have that larger than that in the year coming although we did have the ability to transfer from the federal reserve, we did not think it was necessary or appropriate no need to spend the funds in either spouse fiscal year so we refrained. >> i don't want you to ask to repeat too much but i was taken by the numbers that you gave it your testimony earlier. would you just repeat what you told this committee about 25 million, 6 million, 130,0 00 i believe that was? with to the reserve for those numbers? before the 25 is the amount

refunded of the enforcement actions. >> refunded? >> refunded as a result of actions. 6 million is the number of consumers receive being refunds because of enforcement action. 130,000 represents the number of complaints of consumers since july 2011 and 31,000 is a number of military and veterans' that we communicated with and 2012. >> thank you very much. let me just say i'm very proud of the growth the cfpb has been able to accomplish in a short amount of time. i am very proud that we have managed your budget and i hope you continue in the

manner that you have am pleased to communicate to director condray that he does have support. >> your time is expired. >> you are now recognized for five minutes. >> with $107 million was returned? is that what you said? >> for madrid 25 billion refunded. >> to treasury? >> new funds by private pensions to consumers. >> you're not sending that back to the treasury? i just want to be clear on that. regarding the salary they're asking best practice and is it fair to say that top salary is $259,000? >> i believe the top salary is closer at 251,000 as a result of the director

setting a salary as acquired in dodd/frank better comparable to senators to make that is wonderful because i don't think the federal reserve pay scale is a thousand dollars more. how you count for the $54,000 difference? >> i am not familiar with the federal reserve. >> you said you're not to set up the pace scale as an example. >> i assume you know, what their pay scale is but you are 54,000 more than the fed >> i will go back and check that i am not aware of that. >> treasury is in the same pay scale as congress and they voted 155,000 now 100 less than that cfpb.

do you pay your intern's? >> for that period of time that they actually intern with us, yes. >> what is the budget? >> what is the budget? >> i would have to get back to you i know we have about 75 intern's. >> to one of them know what the budget is better here with you today? >> would be happy to get that back to you. >> do you have bonuses? >> $750,000. how do you decide on those? >> the bureau gave bonuses on performance actually recognize from fyi 2012. >> what is the largest

given? how much money? to make the largest it was consumer financial protection bureau to $12,000 limit to was that given to? >> i can get back to you. >> that would be wonderful. if i heard you correctly correctly, how many people worked at the cfpb? >> 1200. >> if i am not mistaken i believe you spent $55 billion on a renovation for office? >> that is correct. 55 million was still in the planning stages. >> how much of the budgeted for the renovation? >> 95 million. >> how much total has been budgeted for the renovation? >> i believe the 95 million every 13 in addition 50 million fyi 12th but

they have not spent it. >> 1200 people, the $95 million? day know how much that is a person? >> i could calculate its. >> $75,000 per person. roughly? >> cannot have a calculator. >> the cfpb is storing allot of america is data. how much money is budgeted to store the data? >> that depends we have storage for activity. and an aunt then what we

purchase from private vendors. >> with that stated that you take from americans records, how much you spend internally or externally on the storage of the data? >> if you are referring to purchases of data i believe it is approximately $10 billion. >> your time has expired. >> i will yield back. >> you're now recognize for five minutes. >> thank you for being here mr. agostini. how much money was refunded to the taxpayer? >> 125 million. >> 130,000 families? >> no. >> to 130,000 represented

consumers. >> how many people got the 425 million? >> i don't have that number in front of me. that number represents chuck private entities who have gone through enforcement actions with cfpb or in the process. >> i want to know that i thank you share this coming how many individuals or families has benefited from the enforcement? >> 6 million people. that is pretty good. five want to commend you today. its cfpb goes out especially in the environment of high

unemployment, fluctuating gas prices, fell 425 million comes in handy to those people. would you agree? >> yes, sir,. >> you are some of the active players to make sure the money was refunded? >> capital one bank, discover, american express represent three of the largest. loan debt solutions, a mortgage guarantees. >> mr. agostini, let's say they were not one of the firms but you are a firm that deals with this. do you think a firm can now feel they can offer an honest product at a fair price did not have to worry that other people are

cutting corners to make about? >> congressman i believe that is the intent of our approach that consumers get a fair shake. >> but consumers get a fair shake but i will talk about other firms. and honest firm tries to loan money at a fair rate but i have competitors who were doing deceptive things. i will be beached by those deceptive factors. of the belief that i am talking about "the financial times." not the consumers. do you get my point*? >> we at the bureau we believe our actions and

activities in insuring the marketplace is level and fair, level for consumers and businesses to provide products in a manner that is honest and plays by the rules. >> there were questions raised and you have any adl homage the executives in those firms make? >> no congressman. >> is it fair to say it is more than $250,000? >> i am led to believe so. >> so in order to go toe to toe with these. >> absolutely we have to

bring on the best people possible in order to guide us to a capacity to do our work. and it is instructive in many instances with these other regulatory agencies with some of the same tools that we would not have. >> but just to wrap up these finds that you have to levy against the firms for pour practices, did they reform themselves give then they cannot operate that way again? the image that gentleman's time is expired. >> i am not sure about the

motivations of those entities but i expect there watching what the other entities are in gauging us with. >> thank you. >> the committee will stand in recess as the house votes and reinspect the witness will still be here when we return as though it's occasionally do interrupt committee's hearings. with that we stand in recess. [inaudible conversations]

>> we will continue with the line of questioning and now recognize the congresswoman from misery for five minutes >> thank you. mr. agostini, then been a per-capita income in the united states of america is around $43,000. what percentage of cfpb employees would you estimate make more than that amount? >> you don't have that

number? i can tell you that employees make more than that you are not aware that? >> [no audio] >> you are the cfo of the cfpb? and this is a hearing on the budget? on budgetary matters cover correct? and any of the employees that you brought with you discuss any budgetary matters at all? >> again, i don't have the numbers off and i would be remiss if i gave the incorrect number. >> and approximation perhaps, a mr. agostini? >> are you aware how many

cfpb employees make more than $100,000 per year? >> yes. 700. >> 61% make more than $100,000 per year. are you aware those that make more than the cabinet secretary which makes $1,900 per year? . .